According to a report from IDG, Sharp has not so surprisingly announced in its recent earnings report there is “‘material doubt’ about its ability to continue operating.” While Apple’s manufacturing partner Foxconn previously agreed to buy an 11-percent stake in the company, today’s report noted those negotiations continue to drag on and risk falling through as Sharp’s stock price continues dropping. To turn the company around, rumor has it Sharp will focus on its IGZO technology and displays for smartphones and tablets, while possibly seeking investments from Apple in the process:

Sharp added, however, that it still believes it can cut costs and secure enough credit to survive. Its IGZO technology for mobile displays is likely to be a key element of its business strategy…The company, whose stock has been downgraded to junk status by ratings agencies, continues to seek investments from outside companies, with media reports in Japan linking it to companies including Apple and Intel.

As far back as November 2011, Apple was rumored to invest in Sharp’s display factories in Japan. Earlier reports indicated Sharp’s IGZO displays could possibly be used in Apple’s new 7.8-inch iPad mini, but recent teardowns of the device confirm Apple is using display components from Samsung, LG, Display, and AU Optronics. Sharp, however, remains a key Apple component supplier, and it recently confirmed it is back to producing “adequate volumes” of iPhone 5 displays after facing weeks of delays leading up to the device’s launch. In August, a report from Reuters suggested Apple could provide Sharp with financial incentives to speed up production and help with high costs cutting into the company’s margins on displays.

Sharp recently announced its first tablet to use the IGZO display technology. The displays are expected to go into mass production by the end of the year, so it’s certainly possible next generation iPads could take advantage.

About the Author

Jordan writes about all things Apple as Senior Editor of 9to5Mac, & contributes to 9to5Google, 9to5Toys, & Electrek.co. He also co-authors 9to5Mac’s weekly Logic Pros series and makes music as one half of Toronto-based Makamachine.